The price is not the most important thing to a customer, but he wants to know and, more importantly, understand how the cost is structured. How do you make a good price quote in your quotation? Before we explain that, let’s look at the most common mistakes:
The three most common mistakes in price quotes
1: The price is tucked away in the text, and the customer has to look for it.
The customer expects a price at the back of the offer. And then also in a state where the total price is clearly stated. If you mention the price in a sentence, the customer has to search. The customer then feels that you dare not state the price. The annotation expensive will soon be made. Are you ashamed of your prize?
2: The price consists of many components, but only the total cost is visible
You see this often with price quotes from companies offering different products or services. Think about the purchase of a kitchen. Your new kitchen consists of many different parts. Like the countertop, cabinets, doors, drawers, and appliances. Now imagine only getting a total price from the kitchen supplier. Your kitchen will cost €20,000. How do you know which parts are the most expensive? Because if you want to save money, you’re going to look for that anyway. And how do you know exactly what parts are included? Perhaps something is missing that another vendor did include. To compare, choose components and their alternatives, and ensure the offer is complete, you want to see the details. With only a total price, this does not work.
3: The price consists of many components and is all included; however, no total price
If you mention each component, you achieve the exact opposite as in error 2. Now you overwhelm the customer with parts. A quote then quickly consists of a lot of pages. The overview is then missing. Comparison is thus higher math and requires puzzle work on the client’s part. Most customers don’t feel like that. It also produces discussions around tiny parts. Why is the price of your chosen refrigerator higher than the competitor’s and your kitchen countertop lower? That question, of course, cannot be answered.
The structure of a good price quote
A good price quote starts with a clear structure. Price always on the right. The description is always on the left. You don’t put the numbers before the description but after it.
You divide the price quote into sections Unlike in an actual document, a chapter starts on a new page but with a self-explanatory heading and all the parts that go with it together.
Within a chapter, you list the components with any important parts to mention so the customer sees that they are included but do not have a price.
It looks like this:
| Heading 1 | |||
|---|---|---|---|
| Description | Number | Unit price | Overall price |
| Component 1 | 3 | 1,00 | 3,00 |
| – partial component A – partial component B | |||
| Component 2 | 7 | 0,50 | 3,50 |
| Subtotal head 1 | 6,50 |
| Heading 2 | |||
|---|---|---|---|
| Description | Number | Unit price | Overall price |
| Component 3 | 1 | 8,00 | 8,00 |
| – partial component C – partial component D | |||
| Component 4 | 4 | 2,50 | 10,00 |
| Subtotal head 2 | 18,00 |
Total | 24,50 |
Play with formatting to make distinctions. Shading and bold parts attract attention. With clear headings, your customer scans your quote very quickly. If they understand the structure at once, they are much more likely to look closely and not see it as a task.
Between each chapter, you can give a brief explanation of that section. Do so briefly and powerfully in no more than four lines. That’s how you keep track.
After the total price, use the space to explain any discounts or alternatives. You’ll have more room for that, but keep it short and to the point.
Ideally, your quote and explanation should fit on one page. If you need more space, consider including a specification appendix.
Price quote from internal tool
Many organizations have a price quote tool. Almost always, this is a tool directly linked to financial records. These tools are not created to persuade customers, but to tie all components to the accounts properly, have fixed prices, and pursue completeness. Here there is hardly any freedom for a Sales to make its overview for the customer.
This is a waste! If this applies to your organization, investigate whether it is possible to recreate the quote according to the above rules. In some cases, you can’t. Then consider taking a step in between by creating the quote in the tool but taking the outcome to another device where you can customize the layout and formatting. This will probably require some research work and coordination with the appropriate department.
Conclusion
Price quotes are an essential part of your offer. As indicated in the article What is an offer? price is one of the three components the customer wants to see reflected in your quotation. Price is also often a deciding factor. So it is essential to pay attention to the price quote. With the above tips, you can hold your standard quote up to the light.
Would you like a professional look? Then contact a Stryfes Sales Strategist for a no-obligation consultation.
Want to read more about good quotations? Here are a few articles:
